European Commercial Real Estate Finance 2017 Update - CBRE Capital Advisors analysis of trends in Europe's debt market
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
VIEWPOINT CBRE Capital Advisors analysis of trends in Europe’s debt market European Commercial Real Estate Finance 2017 Update
V I E W P O I N T EUROPEAN COMMERCIAL REAL ESTATE FINANCE
Paul Lewis
Head of Loan Advisory,
Capital Advisors
Isra Erpaiboon
Senior Analyst, Capital Advisors
Raphaël Rietema
Capital Markets,
EMEA Research
HIGHLIGHTS
In this year’s debt report, we identify the trends underpinning the composition of
Europe’s debt market. We highlight principal features affecting the European loan sale
market in 2016, while providing deeper 2016 reviews and 2017 outlooks for key
jurisdictions across Europe.
K E Y C O N C LU S I O N S :
• Total nominal value of the European Commercial Real Estate (CRE) investment debt
decreased slightly over the course of 2016 from €1.14 trillion to €1.06 trillion, which is
largely attributed to reduced levels of investment transactions in 2016
• We estimate that new debt issued increased from €68 billion in 2013 to €125 billion in
2015, while maintaining at €116 billion in 2016
• Additionally, the amount of debt retired in 2016 is also in line with the new
origination levels over the past year
• 2016 was the first year, since post-GFC loan sale activity commenced in Europe, that
real estate secured loan sale activity fell
• In 2017, we expect loan sale activity to pick up from 2016, albeit the activity will be
relatively concentrated across several key jurisdictions, for instance Italy and Spain
2017 UPDATE CBRE Capital Advisors ©CBRE Limited | 3V I E W P O I N T EUROPEAN COMMERCIAL REAL ESTATE FINANCE
THE EUROPEAN DEBT LANDSCAPE
In a change from recent years, politics took over from economics as the main driver of the
financial markets in 2016. At the top of the list were the EU referendum and the US
presidential election. However, these were not alone as market moving political events.
The Italian referendum on constitutional change and shifting polls for the upcoming
elections in France and the Netherlands have also had an impact. As a consequence 2016
was a year of volatility, but one where on the whole there was no outright change in overall
trends.
With the exception of a jump in the UK immediately after the referendum, senior lending
margins for good quality property were stable in most countries throughout 2016. For
secondary properties and/or higher LTVs there was some evidence that lending margins
increased over the year. More importantly, from the perspective of the real estate debt
market, the year finished with a strong upward trend in medium term interest rates. This
increase was much smaller in Europe than in North America and Asia, but nonetheless
may signal that the aggregate cost of fixed interest debt is on the increase for real estate
investors.
FIGURE 1: CRE SENIOR LENDING MARGINS (OVER LIBOR/EURIBOR)
Margins over Libor/Euribor for senior lending
Germany Netherlands Spain UK Ireland
450
400
350
300
Basis Points
250
200
150
100
50
0
Q1 2010
Q1 2011
Q1 2012
Q1 2013
Q1 2014
Q1 2015
Q1 2016
Source: CBRE Research, 2017
2017 UPDATE CBRE Capital Advisors ©CBRE Limited | 4V I E W P O I N T EUROPEAN COMMERCIAL REAL ESTATE FINANCE
Our analysis suggests that the total (nominal) value of European CRE investment debt
decreased very slightly over the course of 2016 from €1.14 trillion to €1.06 trillion1.
Although there was a slight dip in the total value of investment transactions in 2016, the
market remained strong overall. This continued investment activity meant that the
amount of new debt issued during the year essentially matched the amount of old debt
being retired. We estimate that new debt issued increased from €68 billion in 2013 (40%
out of €168 billion of CRE investment) to €125 billion in 2015. This was nearly maintained
in 2016 with €116 billion of new debt being created against transactions totalling €255
billion (46%), while at the same time the European CMBS market remained effectively
closed in 2016.
FIGURE 2: DEBT-EQUITY SPLIT IN CRE TRANSACTIONS
CBRE’s estimates of the debt vs equity spilt in European CRE investment market
Equity Debt
300
250
200
Billion €
150
100
50
0
2016
2011
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2012
2013
2014
Source: CBRE Research, 2017 2015
Looking ahead there are some interesting trends to look out for in 2017:
• Our forecasts suggest that despite the dip in 2016, the level of investment transactions
will remain high in 2017, matching the 2016 level
• The upward trend in US interest rates in the last months of 2016 seems to have
paused. However, our house view is that this was the start of a longer term trend and
that the next few years will see further ‘normalisation’ of medium and long-term
interest rates
• The interest rate trend in Europe is not likely to be as marked as that in the US and
although borrowers will have to cope with an increasing trend in the overall cost of
debt in 2017 the increase will be fairly small
• Higher interest rates will also impact on the direct market, reinforcing the view that
(for prime property at least) yields are probably at their floor in this cycle
1
The Euro value of the debt stock can be affected significantly by the Euro-Sterling exchange rate. In order to allow a like-for-like comparison
in the value we have excluded any movements in the exchange rate over 2015 and 2016.
2017 UPDATE CBRE Capital Advisors ©CBRE Limited | 5V I E W P O I N T EUROPEAN COMMERCIAL REAL ESTATE FINANCE
The upward trend in interest rates appears to be a function of a stronger global economic
outlook itself driven by fiscal stimulus either already applied (or intended) by a number of
governments globally (including China, Japan and the USA). This higher economic
growth should be beneficial to real estate in terms of driving up demand and stimulating
rental value growth.
The last few years have seen a very substantial change in the profile of the CRE investment
debt stock. Historic (pre-GFC) debt now makes up relatively small proportion of the total,
with new debt, the result of strong investment turnover in 2014-2016, now making the
biggest contribution to the total stock. In most countries prices have returned to, or
surpassed, the levels at the previous market peak. This means that most historic loans on
investment property are capable of being refinanced on commercial terms and it is
notable that in the UK at the end of 2014 the De Montfort Report2 stopped reporting
information on loans that had been extended because they were impossible to refinance.
FIGURE 3: BREAKDOWN OF EUROPEAN DEBT STOCK (AT END 2016)
Legacy debt is declining and ‘new’ debt, issued post crisis, is increasing
% of Total
11%
3%
Refinanced or rolled over
before 2007
11% 4%
Refinanced or rolled over
between 2007- 2012
36% 28% 11%
Refinanced or rolled over
between 2012 - 2016
End of 2015
New lending before 36% 7% 33%
the end of 2007
9%
New lending between 7%
2007 - 2012 7%
New lending between
2012 - 2016
Source: CBRE Research, 2017
2
The UK Commercial Property Lending Market Research Findings 2015 Year End, Maxted, Porter and Lux, May 2016.
2017 UPDATE CBRE Capital Advisors ©CBRE Limited | 6V I E W P O I N T EUROPEAN COMMERCIAL REAL ESTATE FINANCE
There is still a substantial legacy of historic debt, but its influence on the market will
continue to diminish going forward. Capital value growth in the last few years has improved
the quality of some of this legacy debt, but that growth has been disproportionately in the
prime segments of the market. For example, the CBRE Prime Office Yield index for the Euro
area currently stands at 4.07% compared to a 2007 low of 4.75%. For secondary offices the
equivalent figures are a current 5.45% against a 2007 low of 5.14%. The fact that in most of
Europe the development cycle has not yet meaningfully restarted suggests that loans against
development land (which lie outside the scope of this analysis, but were substantial in
2006/07) will still be out of the money in most cases. However, already a substantial amount
of legacy debt is in the ownership of non-bank vehicles that will be more active in their
management than the originating banks.
As the influence of legacy debt diminishes, the duration profile of the European debt stock is
also normalising. According to our estimates, almost exactly half (49%) of European CRE
debt is due to mature over the next three years. This is consistent with other estimates of the
average duration of new loans being issued. The De Montfort Report3, for example, found
that the average length of new loans granted in the UK in 2015 was five years.
In 2017, the majority (57%) of debt due to mature will be the product of refinancing rather
than new lending maturing for the first time. A high proportion of new debt is for 5-years
duration and although the direct CRE market in 2012 was stronger than in the preceding
years, it was not until 2013 that the level of transactions started to pick up strongly.
FIGURE 4: CRE DEBT MATURITY IN EUROPE (AT END OF 2016)
UK Germany France Iberia Netherlands
140 100%
90%
120
80%
100 70%
% of Total Stock
80 60%
Billlion €
50%
60
40%
40 30%
20%
20
10%
0 0%
2036
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
Source: CBRE Research, 2017
3
The UK Commercial Property Lending Market Research Findings 2015 Year End, Maxted, Porter and Lux, May 2016
2017 UPDATE CBRE Capital Advisors ©CBRE Limited | 7V I E W P O I N T EUROPEAN COMMERCIAL REAL ESTATE FINANCE
LOAN SALE ACTIVITY: 2016 MARKET REVIEW AND BEYOND
2016 was the first year since 2012 when real estate secured loan sale activity fell. Whilst
on the face of it, this may look like a classic peak of the cycle decline, we are not so sure.
To us, it seems like a mid-cycle pause that reflects some of the uncertainty in the wider
market rather than a structural decline in the volume of European loan sales.
FIGURE 5: TRANSACTION CLOSED
Value (CRE) Value (Residential) Total Count
120,000 132 140
100,000 120
96 100
100
Total Considerations (Million €)
80,000
No. of Transactions
52,049
14,682 80
60,000 14,582
60
40,000
40
62,656 50,173 53,652
20,000 20
0 0
2014 2015 2016
Source: CBRE Research, 2017
Overall there was a degree of hesitation by sellers in 2016. We witnessed more deals pulled
or delayed, primarily as a result of wider macro-economic issues and political volatility.
This pushed some deals we expected to close in 2016 into 2017.
As expected the picture is far more mixed on a region by region level. Some countries such
as the UK are now genuinely ending their deleveraging cycle. Some, like Ireland have the
finishing line in sight. Some countries such as Italy are really just starting to make a
market, whilst others such as Portugal are still waiting for the starting gun to fire.
2017 UPDATE CBRE Capital Advisors ©CBRE Limited | 8V I E W P O I N T EUROPEAN COMMERCIAL REAL ESTATE FINANCE
FIGURE 6: TRANSACTION CLOSED BY JURISDICTION, 2016
30,000
25,000
25,288
20,000
Total Considerations (Million €)
15,000
12,828
10,000 11,073
8,206
5,000
4,472 1,780 1,324
0
Italy Ireland Netherlands Spain UK Germany CEE
Jurisdiction
Source: CBRE Research, 2017
Despite the apparent slowdown in loan sales, we see the fundamental rationale for loan
sales only increasing in 2017. Firstly, regulators have grown increasingly impatient with
the pace of Non-Performing Loan (“NPL”) reductions and are now applying far more
pressure where they have leverage to do so. Secondly, the ‘collateral damage’ impact on
banks from NPL Sales has been lessened by both the greater provisioning by the banks
which has increased given the passage of time and greater opportunities to reinvest
proceeds in more profitable and less capital intensive activities. Thirdly, the demand for
NPLs remains very strong. Buyers believe they can deliver greater returns than the
originating banks can through proactive strategies and sellers have the opportunity to
benefit from this. Ultimately banks may be able to enhance total proceeds through a loan
by loan wind-down strategy but after risk and opportunity cost is taken account of, this
strategy often does not payoff.
We think it is for these three reasons that there is still likely to be a solid loan sale market
in 2017 and beyond. The one major impediment to this would be a failure to close the bid/
ask spread that has created a level of inertia in some jurisdictions to date.
2017 UPDATE CBRE Capital Advisors ©CBRE Limited | 9V I E W P O I N T EUROPEAN COMMERCIAL REAL ESTATE FINANCE
BUYER DEMAND
From a buyer perspective the market remains deep. 2016 saw resilient fundraising activity
by both the larger funds and the mid-sized firms. CBRE Capital Advisors is currently
tracking €66.8 billion of dry powder amongst loan purchasers across the globe, with a
focus on European investments. As one would expect, a large majority (92%) of this
capital is held by US-based investors, with the UK accounting for 7% and Italy and France
accounting for the remainder. Additionally, the ultra-low interest rate environment is also
a driver for the investment banks in play.
FIGURE 7: CURRENT DRY POWDER BY FUND MANAGER DOMICILE
€67 billion to invest in loans globally, mostly held by US-based investment managers
7.6%
US
UK
France
Italy
€66.8bn
92.1%
Source: CBRE Research, 2017
The volume of capital in the sector is pushing investors to diversify into new territories
and alternative asset types. This, too, is benefiting the loan sale market, as often those
buyers that want to make an impact on a new territory are also the buyers that are
prepared to pay the highest price.
2017 UPDATE CBRE Capital Advisors ©CBRE Limited | 10V I E W P O I N T EUROPEAN COMMERCIAL REAL ESTATE FINANCE
TRANSACTION SIZE
2016 saw a slight reduction in the average portfolio size, with fewer jumbo deals available
for the handful of major private equity funds and consortia able to absorb them. We also
noticed a rise in the number of smaller deals coming to the market, although many of
these were ultimately pushed into 2017. In our view this also represents a broadening of
the acceptability of loan sales to many of the smaller local banks with smaller distressed
books throughout Europe.
These factors led to an increased willingness to participate in smaller loan sales, and
compete with the mid-sized firms. Portfolios sized in this ‘sweet spot’ of €300-€500
million, where the major funds compete with both investment banks and mid-sized
private equity funds, saw the best competitive tension and consequent pricing in our view.
FIGURE 8: AVERAGE TRANSACTION SIZE BY UNPAID PRINCIPAL BALANCE
820
800
806
780 25,288
760 774
Total Considerations (Million €)
740
720
700 12,828
680 11,073
682
8,206
660
640 4,472 1,780
620
2014 2015 2016
Source: CBRE Research, 2017
2017 UPDATE CBRE Capital Advisors ©CBRE Limited | 11V I E W P O I N T EUROPEAN COMMERCIAL REAL ESTATE FINANCE LIQUIDITY AND PRICING In the sub €100 million bracket, liquidity remains more challenging except for single connection opportunities which are appraised more like traditional real estate. There are now also an increasing number of new entrants in this space eager to take advantage of more granular opportunities. This is aiding liquidity in most markets. Whilst return expectations of the private equity funds have not fallen, buyers are able to take more aggressive views on workout strategies and real estate asset management upside as often they are more financially driven than the seller banks. Therefore pre-sale vendor due diligence of value add asset management initiatives is often key to premium pricing. Clearly those loan pools that are benefiting the most are those jurisdictions where lenders have the highest level of control and a clear route to benefit from enhancements in the underlying real estate. The loan-on-loan market is still strong, albeit lending margins have stabilised and, where available, LTC levels of up to 70% provide support to pricing. However, in the current low interest rate environment, an increasing number of buyers with balance sheet leverage are seeking yield from both unlevered performing and non-performing loan acquisitions, though a relatively strong sustainable income yield is key to this buyer segment. OUTLOOK In our view the outlook for loan sales in 2017 and beyond depends heavily on the jurisdiction. An increased need to deleverage will be partially offset by a natural reduction in the loan books brought about by a recovery in real estate values across Europe. We also see some banks shifting emphasis to other sectors such as consumer loans and shipping. Nevertheless, increased volume of activity will likely be seen particularly in Spain, Portugal and Italy maintaining and potentially increasing volumes in 2017, despite some reductions elsewhere. 2017 UPDATE CBRE Capital Advisors ©CBRE Limited | 12
V I E W P O I N T EUROPEAN COMMERCIAL REAL ESTATE FINANCE
C O U N T RY BY C O U N T RY R E V I E W
GERMANY
Volume Outlook:
Transactions Closed
Transaction Closed (Million €)
Year 2014 2015 2016
CRE 3,755 3,989 1,239
Residential 0 750 0
Total 3,755 4,739 1,239
2016 Top Buyers & Sellers
Purchaser Name 2016 Ranking Vendor Name 2016 Ranking
Apollo Global Management 1 LBBW 1
Octane Capital 2 FMS Wertmanagement 2
Cerberus Capital Management 3
2016 Review
• Loan sale volumes were again relatively low compared to other European jurisdictions
and the volume of NPLs held by banks, reflecting both the health of the German
banking system and the reluctance of many of the Landesbanks to sell
2017 Outlook
• Regulatory pressure likely to increase on German banks
• Further loan sales are expected primarily to come from the non-core wind-down
divisions of the German banks
• We don’t see a particular rapid expansion of real estate secured loan sales with
perhaps greater emphasis on other assets such as shipping
2017 UPDATE CBRE Capital Advisors ©CBRE Limited | 13V I E W P O I N T EUROPEAN COMMERCIAL REAL ESTATE FINANCE
C O U N T RY BY C O U N T RY R E V I E W
IRELAND
Volume Outlook:
Transactions Closed
Transaction Closed (Million €)
Year 2014 2015 2016
CRE 21,186 18,322 11,355
Residential 2,816 3,397 1,473
Total 24,002 21,719 12,828
2016 Top Buyers & Sellers
Purchaser Name 2016 Ranking Vendor Name 2016 Ranking
Cerberus Capital Management 1 NAMA 1
Oaktree Capital Management 2 RBS 2
Colony Capital 3 Danske Bank 3
2016 Review
• A very active year in the Irish market primarily driven by some large highly distressed
NAMA trades, though the NPL sale cycle is clearly in its final years
2017 Outlook
• The Irish deleveraging story is not yet quite complete with further sales expected from
a number of the banks
• We expect to see 2017 loan sales secured mostly on land and residential units
• Sales will come from a small number of banks and potentially NAMA
2017 UPDATE CBRE Capital Advisors ©CBRE Limited | 14V I E W P O I N T EUROPEAN COMMERCIAL REAL ESTATE FINANCE
C O U N T RY BY C O U N T RY R E V I E W
I TA LY
Volume Outlook:
Transactions Closed
Transaction Closed (Million €)
Year 2014 2015 2016
CRE 536 4,635 24,713
Residential 0 628 575
Total 536 5,263 25,288
2016 Top Buyers & Sellers
Purchaser Name 2016 Ranking Vendor Name 2016 Ranking
Fortress 1 UniCredit 1
PIMCO 2 HETA 2
AnaCap 3 BPER 3
2016 Review
• With most of the structural obstacles to private equity investment in Italy now
removed through government legislation, the market finally opened up in 2016.
The market has been less accessible however for many buyers with local servicing
expertise being key to successful acquisitions and workouts
2017 Outlook
• Italy could finally be one of the most active loan sales markets in 2017
• Whilst Italy suffers from the lack of any ‘Bad Banks’, we still expect sellers’ and buyers’
pricing expectations to start to converge in 2017. As banks adopt more achievable
provisioning levels allowing the market to open up, both to new entrants on the
demand side and a wider pool of selling banks on the supply side
2017 UPDATE CBRE Capital Advisors ©CBRE Limited | 15V I E W P O I N T EUROPEAN COMMERCIAL REAL ESTATE FINANCE
C O U N T RY BY C O U N T RY R E V I E W
NETHERLANDS
Volume Outlook:
Transactions Closed
Transaction Closed (Million €)
Year 2014 2015 2016
CRE 896 1,518 7,645
Residential 530 693 4,628
Total 1,426 2,211 12,273
2016 Top Buyers & Sellers
Purchaser Name 2016 Ranking Vendor Name 2016 Ranking
Lone Star Funds 1 Propertize 1
J.P. Morgan 1 Rabobank 2
CarVal 3 FMS Wertmanagement 3
2016 Review
• The Dutch NPL market finally came alive in 2016, with a number of key deals
including Propertize’s Project Swan
• With its creditor friendly insolvency regime and flourishing economy, the market was
a key target for a wide range of buyers
2017 Outlook
• We expect continued activity throughout 2017 as sellers seek to capitalise on strong
investor interest
• However we don’t view the Dutch NPL cycle as a long one. A recovery in asset prices
will lead to a natural paydown of distressed positions and the market is very
concentrated in a small number of books
2017 UPDATE CBRE Capital Advisors ©CBRE Limited | 16V I E W P O I N T EUROPEAN COMMERCIAL REAL ESTATE FINANCE
C O U N T RY BY C O U N T RY R E V I E W
S PA I N
Volume Outlook:
Transactions Closed
Transaction Closed (Million €)
Year 2014 2015 2016
CRE 5,936 6,459 5,743
Residential 7,307 3,952 2,463
Total 13,243 10,411 8,206
2016 Top Buyers & Sellers
Purchaser Name 2016 Ranking Vendor Name 2016 Ranking
Bain Capital 1 Banco Sabadell 1
Deutsche Bank 2 SAREB 2
Oaktree Capital Management 3 Bankia 3
2016 Review
• 2016 saw a reduction in NPL volumes but we expect 2017 to make up for this
• NPL volumes are still high and changes to accounting treatment of distressed assets is
likely to create further impetus over the coming years
2017 Outlook
• Spain (and indeed Portugal) is likely to be one of the most active markets in Europe in
2017 and potentially beyond
• We expect a number of large and small portfolios to come out in 2017 driven by both
large national banks and smaller local players
• We are expecting both granular portfolios and single name trades
2017 UPDATE CBRE Capital Advisors ©CBRE Limited | 17V I E W P O I N T EUROPEAN COMMERCIAL REAL ESTATE FINANCE
C O U N T RY BY C O U N T RY R E V I E W
UNITED KINGDOM
Volume Outlook:
Transactions Closed
Transaction Closed (Million €)
Year 2014 2015 2016
CRE 21,006 8,803 1,669
Residential 3,843 42,199 2,803
Total 24,849 51,002 4,472
2016 Top Buyers & Sellers
Purchaser Name 2016 Ranking Vendor Name 2016 Ranking
Cerberus Capital Management 1 Permanent TSB 1
Deutsche Bank 2 RBS 2
Oaktree Capital Management 3 Co-operative Bank 3
2016 Review
• The UK market was an early leader in the deleveraging cycle and so it is no surprise
that the loan sale story is now tailing off, with a limited volume of NPLs now
burdening the banks
2017 Outlook
• We see the potential for a handful of commercial and residential trades in 2017
• The performing loan market is likely to be the most active, with the majority of
non-performing loans settled on a ‘loan by loan’ basis
2017 UPDATE CBRE Capital Advisors ©CBRE Limited | 18V I E W P O I N T EUROPEAN COMMERCIAL REAL ESTATE FINANCE This report was prepared by the CBRE EMEA Research Team in conjunction with CBRE Capital Advisors. C B R E C A P I TA L A DV I S O R S The team offers independent Capital Markets advice, founded on deep financial expertise and global real asset insight, creating solutions clients trust. The team provides the full range of corporate, structured finance and capital raising services, together with investment advice for funds, portfolios, individual properties, indirect ownership services and complex situations. Our team in EMEA includes accountants, financial analysts, fund managers and property professionals. Our Loan Advisory team advises on the sale, acquisition, valuation and workout of both performing and non-performing loans. The team has acted as loan sale advisor and buy side advisor on Europe’s most high profile NPL portfolios. Our experienced international experts offer a unique combination of real estate and debt advisory expertise. We have also managed many of Europe’s most difficult CMBS and balance sheet loan workouts, with market leading restructuring techniques achieving premium returns for our clients. For more information visit www.cbrecapitaladvisors.co.uk 2017 UPDATE CBRE Capital Advisors ©CBRE Limited | 19
V I E W P O I N T EUROPEAN COMMERCIAL REAL ESTATE DEBT C B R E G LO B A L R E S E A R C H A N D C O N S U LT I N G CBRE EMEA Research Team forms part of CBRE Global Research and Consulting – a network of preeminent researchers and consultants who collaborate to provide real estate market research, econometric forecasting and consulting solutions to real estate investors and occupiers around the globe. CBRE CAPITAL ADVISORS Paul Lewis Isra Erpaiboon Vincent Hsu Head of Loan Advisory Senior Analyst Analyst Capital Advisors Capital Advisors Capital Advisors +44 20 7182 2871 +44 20 3214 1928 +44 20 7182 2429 paul.lewis@cbre.com isra.erpaiboon@cbre.com vincent.hsu@cbre.com CBRE EMEA RESEARCH Raphaël Rietema Capital Markets EMEA Research +31 20 204 43 25 raphael.rietema@cbre.com Disclaimer: CBRE Capital Advisors Limited is an appointed representative of CBRE Indirect Investment Services Limited with is authorised and regulated by the Financial Conduct Authority. Information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to confirm independently its accuracy and completeness. This information is presented exclusively for use by CBRE clients and professionals and all rights to the material are reserved and cannot be reproduced without prior written permission of CBRE.
You can also read
